Under new prudential guidelines, the FSA will require all directly authorised intermediaries to meet minimum business standards after Mortgage Day (October 31 2004) including specific provisions for PII and capital. Firms that fail to comply will be operating in breach of the FSA’s rules.
These measures go beyond the current requirements of the Mortgage Code and will apply to all directly authorised firms from Mortgage Day. Although the introduction of FSA regulation is eight months away, the regulator will expect all firms to confirm their solvency and financial stability during the application process, with details checked against those provided by PI providers.
To help its members understand the changes facing them and the differences between the current Mortgage Code and FSA regimes, AMI has produced a factsheet simplifying the new requirements. ‘Factsheet 8 – PII & Capital Requirements’ can be downloaded from the Publications section of the AMI website, www.a-m-i.org.uk.
Chris Cummings, Director of AMI, said: “It is vitally important that intermediaries meet the FSA’s professional indemnity and capital requirements. If in doubt, AMI members can ask us to clarify the parameters of the rules and what provisions they must make. This factsheet clearly explains the issue for intermediaries and is available free of charge.”
The factsheet is set to be followed by the publication of AMI’s summary of the Mortgage Code of Business (MCOB) rules later this week. The guide, which breaks the 337 page document into a 15 page summary, will be posted to the AMI website at www.a-m-i.org.uk.
